At Simple Revolution, we’ve had the pleasure of working with some great teams who’ve put their heart and souls into crafting and presenting the story of how their organisation creates value. But on publication, there’s always that little nagging voice asking, “Do these hefty publications create value for the readers too? Do they get what they are looking for?”
We asked some of the key audiences of annual reports this exact question. And their answers pointed in different directions. As consultants and co-writers, this left us thinking: Are we doing this right? Could companies communicate their stories in a way that creates more ’return on investment’? With so many target groups involved, how do we make the report interesting and relevant for them all?
Let’s look at two key stakeholder groups:
- The professional investors and analysts who, before the annual report is published, monitor industry reports, financial news and the company’s quarterly reports, and are in direct contact with its investor relations team.
- The company’s key or potential employees, for whom the annual report supplements stories from the website, social media and news-streaming networks.
Widely differing needs
Our survey showed that what these two main groups usually want and expect from an annual report vary considerably in at least three core areas:
1. Lofty purposes or a clear bottom line?
Employees are interested in the company’s objectives and emphasise the importance of the year’s results being linked to and used to support the main stories. However, that is not the first item of interest on an investor’s wish list. For them, a clear bottom line is crucial – and many of them have a keenly developed scepticism about overly general or fluffy purpose statements.
2. ESG – solid data or credible principles?
Employees and investors basically agree that ESG factors (Environmental, Social, Governance) create value for a company. But their views on how these results can and should be reported vary. Investors usually want standardised, well-defined data that facilitates benchmarking against other companies. Employees are more focused on the company providing a credible view of its ambitions and performance. In their view, the principles and reasoning behind initiatives have higher priority than high-tech measuring systems.
3. Precise information or engaging content?
No one objects to an attractive, well designed annual report, but even on that point, the two groups’ priorities differ. Investors give top priority to clarity, focus and easily accessible information. Employees, on the other hand, like to be included and engaged – by relevant stories, captivating images and interesting graphics. They are less interested in technical terms and data heavy tables.
More value for money?
So how should a company address such widely differing wish lists when efficiently communicating important messages to its stakeholders? Our survey underlined three important points that everyone should consider before revving up their reporting machinery.
First, take extra care to understand stakeholder landscapes and the needs and interests of individual target groups. Naturally, companies have plenty to tell, but their heartfelt stories only create value if their target groups’ burning questions are answered first. That involves the company remaining in constant dialogue with stakeholders and being ready to gear its communication accordingly.
Second, view reporting as more than a permanent fixture anchored in the corporate calendar by one standalone publication. Your company creates value all year round, and that should be reflected in more continuous communication – a dynamic narrative that is constantly developed and can be summarised in an annual report.
Third, as a logical consequence of the first two points: differentiate communication more to suit individual target stakeholders. They are all interested in how the company creates value but as they prefer different kinds of content and presentation, more frequent small communication products that hit home with target groups are better than one publication that falls short of several marks.
The worry is that communicating responsively – continuously and with differentiated messages – requires even more resources. Not necessarily. Not if you think ahead and organise communication holistically and cohesively. For example, with one team responsible for defining, maintaining and rolling out the main story about how your company creates value – throughout the year and on all relevant platforms.
In fact, the relevant question here is: Can most companies get more from the resources they are currently spending on their annual reporting? Based on both our survey and our many years of experience in the field, our answer is a resounding YES.
You can read the full findings in our study, Trends in Danish corporate reporting (vol. 2). Understanding key stakeholders here.
Trends in Danish corporate reporting was produced in collaboration with Kontrapunkt, Marketminds and Confederation of Danish Industry.